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2023 (6) TMI 13 - HC - Service TaxSabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme - cut-off date for availing the benefit of the scheme - Circular No. 1071/4/2019-CX.8 dated 27.08.2019 - HELD THAT - A careful perusal of the section 124(1) (a) (c) of the scheme would show that the reliefs under the Scheme is broadly classified as those falling under litigation category and the other falling under the arrears category. In the former category the amount of duty is disputed or is capable of being disputed and yet to be finalized, while in the latter category, amount of duty is not in dispute or has become final. On a conjoint reading of the aforesaid provisions, it is manifest that the SVLDR Scheme was extended to cover those category of cases where there was existing some degree of finality with regard to imposition of duty/tax dues as on the cut off date . Reverting to the instant matter, the SVLDR Scheme was notified on 21.08.2019 and brought into effect from 01.09.2019 did not per se apply to the petitioner who filed an appeal against the imposition of duty/tax subsequent to the cut off date . The plea of the petitioner that such cut off date had placed it in no man s land and it was deprived of the benefit of the Scheme was addressed on interim orders passed in the earlier writ petition bearing W.P.(C) 11001/19 CM Application 4505/19 which led to the respondent No. 2 issuing the aforementioned Circular No. 1073/06/19-CX dated 29.10.2019. Consequent to which, the petitioner submitted a declaration SVLDRS-1 on 30.12.2019 with an undertaking to withdraw the appeal, which was eventually withdrawn on 27.01.2020. A comprehensive and harmonious interpretation of Section 123 (a) (1) read with Section 124(1) (a) of the Scheme leaves no scope for doubt that on withdrawal of the appeal filed post 01.07.2019 and on filing of declaration, its case was to be considered under the arrears category so much so that the petitioner even accepted the calculation computed by the Department and paid the payable amount as mentioned in the SVLDRS-3 without any demur or protest on the basis of which Discharge Certificate was issued on 03.07.2020. At the cost of repetition, once the pending litigation had been withdrawn, the demand of duty raised by the tax authorities attained finality and a fortiori fell under the definition of amount in arrears and the declaration was rightly considered under the arrears category. Before finally drawing the curtains down on this petition, it would be pertinent to mention that this Court in the case of Nidhi Gupta v. Union of India 2019 (12) TMI 1012 - DELHI HIGH COURT , had an occasion to examine the SVLDR Scheme, 2019 and in reference to Section 121(C) (i) (ii) that defines the term amount in arrears as also the amount of duty which is recoverable, it was observed that the position has been explained vide Circular No. 1072/05/2019.CX dated 25.09.2019 vide clause (viii) that categorically enabled the tax payers to file declaration under the Scheme on giving an undertaking in writing to the Department that he would not file appeal, and suffice to state that the said Circular was held to be in consonance with Rule 3 of the Scheme-2019 floated under the Finance Act, 2019. There are no merit in the present writ petition. The same is dismissed.
Issues Involved:
1. Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDR Scheme). 2. Classification of "tax dues" under the SVLDR Scheme. 3. Validity of the Circular dated 29.10.2019 and FAQ No. 6. 4. Finality of tax dues and the impact of withdrawing an appeal. 5. Reliefs sought by the petitioner under the SVLDR Scheme. Summary of Judgment: Issue 1: Eligibility under the SVLDR Scheme The petitioner, a company engaged in broadcasting and telecommunication services, was assessed for service tax and sought to avail benefits under the SVLDR Scheme. The initial grievance was that the benefit of the Scheme was confined to cases where the appeal was pending or decided before 01.07.2019. The petitioner filed an appeal on 16.08.2019, which was excluded from the Scheme. The Court had earlier directed respondents to examine extending the benefit to the petitioner, leading to the issuance of Circular No. 1073/06/2019-CX dated 29.10.2019, allowing declarations under the Scheme for appeals filed post-01.07.2019, subject to withdrawal of the appeal. Issue 2: Classification of "tax dues" under the SVLDR Scheme The petitioner classified its "tax dues" under the "litigation" category in Form SVLDRS-1. However, the respondents reclassified it under the "arrears" category, leading to a lesser rebate. The petitioner argued that this classification was arbitrary and contrary to the Scheme's objectives. Issue 3: Validity of the Circular dated 29.10.2019 and FAQ No. 6 The respondents issued Circular dated 29.10.2019 and FAQ No. 6, clarifying that cases where appeals were filed after 30.06.2019 should be classified under the "arrears" category if the appeal was withdrawn. The Court found that these clarifications were consistent with the Scheme's provisions and objectives. Issue 4: Finality of tax dues and the impact of withdrawing an appeal The Court held that once the petitioner withdrew its appeal, the demand of duty raised by the tax authorities attained "finality" and fell under the "arrears" category. The petitioner was aware of this classification and chose to withdraw the appeal voluntarily, making the reclassification lawful. Issue 5: Reliefs sought by the petitioner under the SVLDR Scheme The petitioner sought to maintain the status quo regarding its declaration under the Scheme, accept payment of "tax dues" post 30.06.2020, and re-compute "tax dues" under the "arrears" category. The Court dismissed these pleas, stating that the petitioner was estopped from challenging the classification after voluntarily withdrawing the appeal and accepting the computed dues. Conclusion: The Court dismissed the writ petition, finding no merit in the petitioner's claims. The SVLDR Scheme's provisions and the respondents' clarifications were upheld, and the petitioner's classification under the "arrears" category was deemed appropriate. The pending application was also disposed of.
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